Global Daily Tax News, Taiwan Updates List Of Low-Tax Territories For CFC Purposes, (Feb 6, 2026)

Taiwan's Ministry of Finance has updated the list of low-tax territories for purposes of application of the territory's controlled foreign company (CFC) rules for companies, which were implemented from the 2023 tax year.

The CFC regime for companies applies where a Taiwanese profit-seeking enterprise and its related parties directly or indirectly hold 50 percent or more of the shares or capital of a foreign enterprise that is registered in a low-tax jurisdiction. The rules also apply where the Taiwanese enterprise has a "significant influence" on the overseas entity, regardless of ownership.

The regime for companies includes an exemption from the rules for entities established overseas that engage in substantial "operating activities" underpinned by economic substance, or where the current year earnings of the CFC are less than TWD7m (USD217,000). Where the rules apply, retained income earned by the CFC is taxable, in whole or in part, in Taiwan. A territory is considered a low-tax jurisdiction if its profit-seeking enterprise income tax rate, or rate of similar tax, is not more than 70 percent of Taiwan's rate (that is, not more than 14 percent).

The Ministry of Finance notes that Anguilla has been listed, alongside 30 other territories, for applying a corporate income tax rate below 14 percent, while Belize has been listed, alongside 48 other territories for taxing income only from domestic sources, while providing that income from foreign sources is taxable only upon actual repatriation.